TaxTMI 
TaxTMI 
2017 (6) TMI 865
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....s for and on behalf of the assessee, it was submitted by the ld. Authorized Representative (AR), the assessee's counsel, that per the instant appeal the challenge is to the legal competence of the Assessing Officer (AO) to scrutinize the assessee's return of income, filed on 29.07.2013. The assessee, he would continue, is a 24 year salaried person, so that salary constitutes his principal source of income. He was accordingly surprised to receive a notice u/s. 143(2) dated 03.9.2014 (for the relevant year) for 25.9.2014. The hearing was however adjourned to 16.01.2015, whereat the assessee was required to attend on 06.02.2015, furnishing along with a list of requisitions (vide letter dated 16.1.2015). Para 6 of the said letter required the a....
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.... to the aspects of the information received through the AIR. And further, that a wider scrutiny of the returns could be only with the approval of the Administrative Commissioner, i.e., where it is felt that apart from AIR information there is a potential escapement of income of more than Rs. 10 lacs (PB pg. 21). As such, not only the continuation of proceedings after the furnishing of the reply, explaining the position vide letter 17.02.2015 (copy on record), is bad in law, the AO could not have ventured to examine other aspects of the matter, making additions at an aggregate of Rs. 2.03 lacs under the heads of income 'salary' and 'income from his property'. On being asked if he had anything to say on the merits of the two adjustments (to h....
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....nd perused the material on record. The CBDT has u/s. 119(2)(a) the power to issue directions or instructions to the Income Tax authorities (not prejudicial to the assessee) for the purpose of proper and efficient management of the work of assessment and collection of the revenue as to the guidelines, principles or procedures to be followed by them in the work relating to assessment or collection of revenue, and which may be either by way of relaxation of any of the provisions specified therein, which includes s. 143, or otherwise. The Instruction dated 08.09.2010 supra would therefore be binding on the AO, an Income Tax authority under 116 of the Act. The assessee claims violation thereof, assailing the ensuing assessment proceedings on th....
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.....2014 issued by the CBDT. It is made abundantly clear therein that the selection under CASS is only on the basis of either AIR data or CASS information or for non reconciliation of 26AS data, and that the scope of inquiry in such a case should be limited to verification of those aspects/issues only. Further, that such notice would be issued to the tax payer with the remark 'selected under computer assisted scrutiny selection (CASS)' (paras 2, 3 of the Instruction), as indeed stands notified per the notice u/s. 143(2) under reference. Further, a wider scrutiny of the return, i.e., on aspects other than for which it was selected for examination, shall be subject to the approval by the higher authorities, in writing, where the income escaping ....
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.... the assessee, who represents the first party, is liable to be assessed in his representative capacity, treating him as an agent of the non-resident principal u/s. 163 of the Act. The 'jurisdictional' fact of the notice being in respect of an AIR case stands established, and its legality therefore cannot be questioned. The next question is if the assessee having furnished the PAN of his brother, clarifying his role to be no more than his representative, the party of the first part in the sale deed, which is the subject matter of AIR information, ought the AO to have dropped the proceedings. That is, is the AO obliged to do so. I find no legal mandate for the same. Rather, s. 119(1)(a) clearly places a restriction on the power of the Board t....